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The U.S., a major oil producer, woos other countries to produce more oil

A MARTINEZ, HOST:

The U.S. is the world's top oil producer. So why is it trying to woo countries such as Saudi Arabia, Iran and Venezuela to produce more oil when it could be pumping more oil at home? NPR's Brittany Cronin went to find out.

BRITTANY CRONIN, BYLINE: Let's start at the White House. President Biden says despite his long-term climate ambitions, he's not standing in the way of U.S. oil producers.

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PRESIDENT JOE BIDEN: And the oil and gas industry has millions of acres leased. They have 9,000 permits to drill now. They could be drilling right now, yesterday, last week, last year.

CRONIN: Biden has a complicated history with oil companies. He campaigned on transitioning away from oil. But to get gas prices down, he wants oil companies to ramp up production fast.

Vicki Hollub, president and CEO of Occidental Petroleum, says that's easier said than done. At the CERAWeek energy conference last week, she was asked about how quickly oil producers can boost output, and the outlook was not good.

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VICKI HOLLUB: I would say that we're in a really dire situation here.

CRONIN: Coming into this year, Hollub says oil producers weren't really planning on significant growth. The industry was recovering from a huge drop in demand early in the pandemic. It's still about a million and a half barrels per day short of pre-pandemic production. And now these companies are being asked to pump even more.

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HOLLUB: Nobody really prepared in advance for significant growth. And so now with the supply chain challenges, it makes any kind of attempt to grow at a rapid pace very, very difficult.

CRONIN: But start with the fact that more oil requires drilling more wells.

Farzin Mou, vice president of intelligence at Enverus, an energy analytics company, says it's not as simple as turning a spigot.

FARZIN MOU: The point from which you drill a rig to the point that you can turn it online - it takes about 6 to 8 months typically.

CRONIN: And these days are anything but typical. Mou says she doesn't expect to see more oil until next year. That's for a few reasons, starting with the supply chain. So first, there's materials. To drill an oil well, you need things like sand and steel, things that are expensive and in short supply right now. Then you have labor. The number of workers producing oil and gas had been declining for years. Then at the beginning of the pandemic, a lot of workers got laid off.

STACEY MORRIS: And those people may not come back, right?

CRONIN: That's Stacey Morris, director of research at Alerian, an energy data provider.

MORRIS: They've probably had to go on and find something else to do because their job in the oil industry went away.

CRONIN: Last year, some of those jobs did come back, but not all of them. But the biggest factor for oil companies right now might actually be fear. Their investors have been telling them to focus on returns over growth. Don't go chasing the next oil boom.

MORRIS: I think energy companies were very afraid to ramp production because they were going to get punished by investors.

CRONIN: Now, maybe Russia's invasion into Ukraine will change that equation. But top oil executives are proceeding with caution. Oil prices are volatile. And they're all too familiar with the bust at the other side of the boom.

Here's Vicki Hollub, Occidental Petroleum president and CEO.

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HOLLUB: I think there has to be growth in supply at some point when we can make it happen.

CRONIN: No promises when that will be - so if you're hoping that U.S. producers might relieve some of that pressure at the pump, you might be waiting for a while.

Brittany Cronin, NPR News.

(SOUNDBITE OF MOKHOV'S "AUSPICIOUS PATH") Transcript provided by NPR, Copyright NPR.

Brittany Cronin
Brittany Cronin covers cars, energy and the future of mobility for NPR's Business desk.